Rationing Health Care II: Public and Private Alternatives

A member of the studio audience today accused me (politely) of missing the point with respect to the rationing of health care. The missed point is that there is something particularly onerous when the government rations health care, compared to when the market does so.

The point I think you may have missed is that it matters who is doing the "rationing." Rationing that is a result of market forces and choices of individuals is substantially less onerous than rationing the government employs to keep costs down. The simple reason is because the government can and must impose upon a market to get the desired results.

I am going to disagree with the claim that this was 'the point' of the article in question. The article clearly stated that the problem with 'ObamaCare' was 'rationing' – not that it was the wrong type of rationing. Furthermore, Feldstein described the market as one that allocated resources according to preference, when in fact markets ration on the basis of preferences and ability to pay.

A person with a lot of money can and will bid goods and serves away from people who may have a stronger preference for those goods but which lack the ability to pay. For example, if, in the face of a deadly global plague, if somebody were to put 1000 doses of an effective vaccine up for auction, and there was no substitute, what percentage could be expected to go to poor people? To what degree is 'ability to pay' the better explanation for who gets these 1000 doses than "having a strong preference to live?" That is to say, the doses will go more to the 1000 richest people (and their families), not the 1000 people with th strongest preference for living.

Another example that I have used is one in which there is a severe shortage of water. One person wants a bottle of water to give to her sick child. However, another wants the water so that she can shampoo her dog. The latter, who, we assume, has millions of dollars can easily bid the water away from the person who only has a few dollars to her name. Yet, the idea that this fact alone means that the rich person values shampooing her dog more than the poor person values the health of her child is . . . well . . . let us just say that it is not necessarily true.

However, this does not mean that there is no reason for concern when it coms to government rationing of health care.

The biggest danger is that politicians will come to use health care as a way of buying votes "If your group supports my candidacy I will award you with favored status when obtaining government-sponsored health care. If, on the other hand, you oppose my candidacy, I will punish you with a higher bill to cover the costs."

It is a great deal of power to give legislators, and most of that power will be exercised without the voter ever finding out about it. The laws will be rewritten with subtle amendments that will fly under the radar – each of them shifting the burden away from those the ruling party wishes to weaken, and providing benefits to those the ruling party decides to strengthen.

The result will be a lot of expensive and useless treatments mandated by Congress that will drive up the costs. They will do this because what is useless to a sick or injured citizen is useful as a way for a politician to funnel money from those he wants to weaken to those he wants to strengthen.

Let us not pretend that legislators are all full entirely of good will and human kindness. Even a kind person has his favorites. It would be naïve to expect that this would not happen.

However, whether it is more onerous to take health care goods and services away from those who lack the ability to pay and give it to those have that ability, or to take it from those who opposed the current ruling political party and to give it instead to those who supported the ruling party, is not immediately obvious. At least it is not obvious to me.

This is not an instance of choosing between rationing and not rationing. This is an instance of choosing between rationing based on ability to pay, and rationing based on fealty to the ruling party.

This is an area where I would like to see a nice, rational, public debate. This is the debate that the sophist keep us from having by polluting the public channels with their lies, fictions, and nonsense. This is what qualifies sophists as evil people – as people who belong in a moral category below that of drunk drivers and negligent parents or guardians. We suffer, and we suffer greatly, at the hands of the sophists, yet we do not take sufficient steps to protect us from that harm.

There was a time, not long ago, when drunk drivers were given a substantially free moral pass. Then, enough parents lost enough children to drunk drivers that they took the position that this moral crime was not given the condemnation it deserved. They lobbied to crank up the social condemnation of drunk drivers, and we are better off because of it.

There are benefits to be had for cranking up the public condemnation of sophists. The burdens we have suffered at the hands of the sophist in the past decade has been staggering – and our children will likely suffer a much greater costs. The sophists have destroyed whole countries and are capable even of putting the survival of the human species itself at risk. It is time to recognize the harm they do, and to respond appropriately.